Alaska Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.

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An employer-employee relationship is a prerequisite for determining whether an individual is eligible for workers' compensation coverage (AK Stat. Sec. 23.30.010). The Alaska Supreme Court has ruled, however, that a "nature of the work" test should be adopted in resolving future employee status issues under the Alaska Workers' Compensation Act (Searfus v. Northern Gas Co., 472 P.2d 966 (1970)). The court said that such an approach is more consistent with the philosophy of compensation legislation than the master-servant control test. The court also indicated that the definition used in the unemployment compensation act was relevant for purposes of defining the term "employee" in workers' compensation cases.

Individuals who perform services are presumed to be employees covered by the unemployment compensation act whether or not the common-law requirements for an employee are met, unless and until it is proven that:

• The individual has been and will continue to be free from control and direction in connection with the performance of the service, both under the individual's contract for the performance of service and in fact;

Record retention is complex and time consuming. However, in addition to complying with various federal and state laws, keeping good, well-organized records can be very helpful in documenting and supporting an organization’s employment actions.
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This special report will discuss how you can ensure your records are in good order, and establish a record-retention policy.